Pension fees will be legally capped as part of a "full-frontal assault" on charges that can consume as much as half a worker's retirement savings, the pensions minister has announced.

Steve Webb announced that pension fees will be capped at 0.75 per cent of the funds being managed, a move which will transfer £200 million "from the profits of the pension industry to the pockets of savers".

He also announced that fund managers will be barred from taking sales commission from people's pension pots and charging people who have left their employer more in pension fees.

He told Commons: "The pension scheme we inherited was broken. This is a full-frontal assault on poor value for money from a government that is on the side of people who save.

"Through the new measures this government will be the first to get an iron grip on pension charges. We are going to put charges in a vice and we will tighten the pressure year after year."

The pensions cap will come into force in April 2015, a year later than originally planned, and could be reduced further in 2017.

Mr Webb also announced plans to "shine sunlight into the dark recesses of the pensions industry" by forcing fund managers to make a "full, standardised disclosure of all charges".

The Telegraph has repeatedly highlighted the impact of pension fees over the past two years, disclosing how complex and often hidden charges can cut savers’ retirement funds by as much as half over a working career.

A recent Office of Fair Trading (OFT) investigation into the £275 billion pensions industry concluded that millions of workers are left short-changed and bewildered by retirement schemes that carry a complex web of up to 18 different hidden fees.

There are around 186,000 pension schemes outstanding where managers charge fees of 1 per cent or more, according to the OFT.

Government calculations suggest that someone in one of those schemes paying in £100 a month over their career would be almost £35,000 better off over their retirement if fees were reduced to 0.75 per cent.